Creative Structuring
This group will allow you to structure deals outside of your traditional lending or offers. We... View more
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Balloon Payment
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Balloon Payment
Francisco, I have been looking at your answer and asking myself why I had not thought of that. Here is why, if he pays a balloon payment at the end of the 60 months, he has over paid by approximately $10,00 for the trailer. So talking with my husband, he helped me put into math how this probably worked. He offered to pay $37,500 to the bank for a trailer worth only $27,000. He put down 10% payment of $3,750 = a note for 33,750. 60 payments of $306.00 = 18,360. If he had to pay a balloon payment after that of $15,390, he would have paid $37,500 for a trailer worth only $27,000. However, if he then rented the trailer for $806.00 over for the 60 months = $48,360 – $18,360 = $30,00. He makes the balloon payment of $15,390 and still makes $14,610.
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